Yancey Productions is a film studio that uses a job-order costing system. The co
ID: 2331211 • Letter: Y
Question
Yancey Productions is a film studio that uses a job-order costing system. The company's direct materials consist of Items such as costum es and props. Its direct labor includes each film's actors, directors, and extras. The company's overhead°sts ncudetems such as utilities, depreclation of equipment, senlor management salaries, and wages of malntenance workers. Yancey appliles its overhead cost to films based on direct labor-dollars. At the beginning of the year, Yancey made the following estimates Direct labor-dollars to support all productions Fixed overhead cost Variable overhead cost per direct labor-dollar $ 8,378,888 $ 5,822,00 8.87 Requirec: 1. Compute the predetermined overhead rate. 2 During the year, Yancey produced a film titled You Can Say That Again that Incurred the following costs Direct materials Direct labor cost $1,428,e8 2,511,808 Compute the total Job cost for this particular film Complete the question by entering your answers in the tabs given below Required 1Required 2 Compute the predetermined overhead rate. (Round your answer to 2 decimal places.) redetermined overhead rate per DLSExplanation / Answer
a. Calculation of Pre-determined overhead rate
Direct labor cost = $8,370,000
Variable overhead cost per Direct labor - dollar = $0.07
Therfore, total estimated variable overhead cost = $8,370,000 x $0.07 = $585,900
Total estimated overhead cost = Fixed overhead cost + Variable overhead cost
Total estimated overhead cost = $5,022,000 + $585,900
Total estimated overhead cost = $5,607,900
Pre-determined overhead rate = Total estimated overhead cost ÷ direct labor cost
Pre-determined over rate = $5,607,900 ÷ $8,370,000
Pre-determined overhead rate = $0.67 per direct labor-dollar
b. Calculation of total Job cost for the film
Note 1 Calculation of total Overhead cost applied to the film
Total direct labor cost = $2,511,000
Pre-deteremined overhead cost per direct labor - dollar = $0.67
Therefore,
Total overhead cost applied = $2,511,000 x $0.67
Total Overhead cost applied to the film = $1,682,370
Amount Direct material cost $1,420,000 Direct labor cost $2,511,000 Overhead cost (Note 1) $1,682,370 Total Job cost $5,613,370Related Questions
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